Dell Computer Entered into a Strategic Alliance with Lexmark, a Producer

question 16

Essay

Dell Computer entered into a strategic alliance with Lexmark, a producer of printers and ink cartridges, to provide a more direct challenge to Hewlett-Packard (H-P)-the market leader in printer and cartridge sales. Clearly, this will take time and a well conceived strategy by Dell because H-P has about 50 percent market share in printer sales and a huge installed base of printer customers around the world. For this strategic initiative in the printer business, describe how Dell might use a strategy map to illustrate objectives, targets, and strategies as well as measures it might use to assess its performance in this new business.

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Definitions:

Common Stock

Equity ownership in a corporation, with voting rights and a residual claim on corporate earnings.

Treasury Stock

Stock that has been issued but has been bought back by the corporation or received as a gift.

Net Cash

Describes the amount of cash remaining after all cash expenditures, or disbursements, are subtracted from the cash receipts during a given period.

Indirect Method

A method used in accounting to calculate cash flows from operating activities, adjusting net income by changes in non-cash accounts.